• 22nd October 2013 - By David

    When a building is constructed, there may be one contractor and several sub-contractors involved. When it is a small project, such as installing a swimming pool, there is usually only one contractor. In both cases, however, there will always be other workers involved. Naturally, all must be paid for the work performed and supplies provided.

    Although the law varies from state to state, if a contractor or sub-contractor is not paid what they are owed they are entitled to file a contractor’s lien, also known as a mechanic’s lien, against the property. This lien is filed with the county clerk’s office and is attached to the property deed. This means that the property cannot be sold until the contractor or sub-contractor has been paid for work performed or goods delivered.

    Depending on the laws of the state involved, such a lien can initiate foreclosure of the property to satisfy the lien and recover the labor, materials, and services the complainant has provided to the project. Some states have laws that professionals, such as surveyors, engineers and architects can file a lien for their services. The contractor lien Utah Law states, “Any person or entity who performs labor, furnishes materials, or renders services that improve real property including contractors, subcontractors, artisans, architects, engineers, laborers, etc” can file a mechanic’s lien.

    In 2005, Utah established a State Construction Registry (SCR) System. This system is standardized and has a process for filing and managing the lien process. It works in two areas. On May 1, 2005 rules went into effect on nonresidential construction projects and on November 1, 2005 rules for residential construction. All notices of start, first notices, and notices of completion must be viewed and filed with the State Construction Registry.

    Whenever any type of construction work is considered, it is important that a legal contract be signed. This contract should include the total cost of the project as well as when the job is expected to be completed. As a rule, the contractor will require a certain amount of money at the beginning of the project and the contract will state the intervals at which other sums due. Financing must be in place prior to any start on the job. On large projects, an arrangement is usually made with a bank or other financial institution.

    It is essential that, during the work of construction, the owner obtain lien releases or waivers of lien forms from each material supplier and subcontractor. This is extremely important, as even if the property owner has paid the contractor, they may not have paid the sub-contractors. This leaves the door open for the sub-contractors to file a lien against the property.

    Whether constructing a new building or making renovations, it is important that the property owner be aware of the state’s laws regarding contractor or mechanic liens. This will require research, but there are excellent articles on the Internet that give detailed information regarding proactive measures that can protect the property against a construction lien.

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